UTB secures ENABLE Build guarantee to support SME house builders

United Trust Bank (UTB) has secured an ENABLE Build guarantee via the British Business Bank.

The new guarantee is the first to be issued under the ENABLE Build programme and will allow UTB to significantly increase the amount of development finance it provides to UK SME house builders.

Over the lifetime of the £250m guarantee, it is expected to help support the construction of more than 2,700 units of new housing through the provision of more than £500m of funding to SME house builders.

The British Business Bank’s ENABLE Build is a variant of its ENABLE Guarantee programme and will allow UTB to increase its support to banks that wish to fund smaller house builders. As a sector, according to the British Business Bank, SME house builders and developers have “traditionally struggled” to access the finance they need.

The ENABLE Build programme is designed to encourage additional lending to smaller house builders by reducing the amount of capital required to be held against such lending by the participating bank. Under both the ENABLE Guarantee and ENABLE Build programmes, the government takes on a portion of the lender’s risk on a portfolio of loans to smaller businesses, in return for a fee.

Housing Minister, Christopher Pincher, said that small house builders are “vital” to building the homes the country, needs but too often struggle to access affordable finance.

“The ENABLE Build programme allows lenders to fund more SME house builders and get more shovels in the ground,” Pincher commented.

British Business Bank managing director, guarantee and wholesale, Reinald de Monchy, said: “We are very pleased to announce our first ENABLE Build transaction, continuing support for smaller house builders to gain access to the finance they need.

“The ENABLE Build guarantee will help UTB provide the extra finance that smaller house builders require to allow them to grow, succeed and build, while diversifying the housing market and delivering thousands of homes and jobs in the process.”

The latest guarantee follows UTB’s previous ENABLE Guarantee which to date has helped support the construction of over 1,800 units of new housing, and provided more than £340m of funding to SME house builders.

UTB CEO, Harley Kagan, added: “Many SME house builders rely on specialist lenders like UTB to access the funds they need to keep building and growing.

“I am delighted that we are once again collaborating with the British Business Bank to increase the availability of development finance. This ENABLE Build guarantee will help us to increase our ability to support the SME housebuilding sector.

“The programme is another great example of the positive impact specialist banks and government agencies can have when they work together to achieve a common goal.”

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